Five months and one week ago Jessie Papatolicas, our two puppies and I began our new life at Cooper Union. It has been a distinct honor and privilege to assume the presidency of this historic institution as the twelfth president in the Peter Cooper succession.

Taking a new job is always an adventure. Many people stay at one job all their lives. I was ready for an adventure and I am thrilled that it has proved to be one. Despite the turmoil, I wake up each day inspired by the institution, by its founder, and most of all, by you all, the people I serve.

This is the end of the semester. Cooper Union is a place where students work extremely hard, so this is a challenging time. I certainly understand that for a lot of students, right now, they are doing what we, as a faculty, would want them to be doing.

I look forward to students tomorrow coming to our home for the study break -- where we will have some ice cream for which I have a great weakness -- and to have a chance to relax for a few minutes between study sessions. I also look forward to spending time with students in January with Dean Baker who has organized a ski trip. I'll be on the beginner slopes even though I spent many years in Hanover, New Hampshire. And so, for those who are going to be on the beginner slopes, we'll get to know each other. We'll fall together. It's not about skiing, it's about building community, getting to know each other as Jessie and I had a chance to do when we were with Dean Baker in the fall at the Cape Cod orientation.

My remarks today are going to be in three parts. First I want to thank all of our constituents and donors and go through some of the extraordinary gifts that have come through just in this academic year. Second, I want to reflect a bit about this extraordinary institution, its unique characteristics and the tremendous opportunities that we have going forward, as well as some very significant challenges. I want to briefly summarize the financial challenges without going into too much detail -- both the short-term and the long-term challenges. And then, finally, in the third part, I want to talk about the process we will use going forward to elicit ideas both on the revenue side and the cost side to put the institution on a stable financial footing.

So, first, this is an amazing community, and I want to thank you all for the warm welcome. When we walk our puppies down the street we often bump into faculty, students and alumni. A lot of what we learn about the institution comes from those informal discussions, which are as important as the formal avenues for communication that we have utilized and will continue to utilize, this being one of them. I hope we can have this kind of meeting at least once a semester, but also there are the Faculty meetings, the Faculty-Student Senate, the union leadership groups, the Alumni Council, and the Student Council. I will look forward to communicating through all of these bodies but also through a lot of one-on-one meetings. We will come together in many venues.

What I have learned is that there is a yearning to communicate. Many people know that I am ready to spend from seven in the morning until eleven at night, meeting with you. Many of you, and many alumni who are not here today, have availed yourselves of the opportunity. Jessie knows waiting while the dinner gets cold that I've often taken from 6 p.m. to 10 p.m. meeting with alumni to hear their concerns and to talk a little bit about the problems. So communication is going to be key.

I want to thank all of our constituents and constituencies for all of the extraordinary work that they do at Cooper Union. The faculty really is the core of the institution in so many ways. They are responsible for the education experience our students receive. I want to make sure that all faculty are acknowledged: full-time faculty, proportional faculty, and our adjunct faculty who play such an important role in providing this amazing education. The staff -- there are a lot of people who work behind the scenes who make it possible for this work to continue -- I want to thank you. The alumni have a passion for the institution and that is so valuable. Thank you for that, and thank you for the opportunity to learn from you. I hope this will continue. Most importantly, it's about the students. I decided to teach a class this fall even though that was not advisable in the first semester of a new presidency. But it seemed to me we're here for the students. It was important to me and I decided to teach something that would involve the students from all schools. That's been a real pleasure.

PART I: GIFTS

Now, we’ve got some good news today. We have a community that has stepped up philanthropically, which bodes well for our reinvention plans:

A non-alumni donor has pledged $1,000,000 as a challenge to be matched

This is a 1:1 match for new gifts this fiscal year and a 1:1 match for increases in gifts given after July 1 of this year (2011).

Eight individuals, foundations and corporate donors have given gifts of $100,000 each.

Other individual and foundation donors have given:

$55,000

$52,000

$40,000

$27,000

$25,000

Here are some very, very encouraging statistics. Giving through the annual fund is up 64 percent to $817,000 and we still have a few weeks left in this calendar year for those who may want to get a tax deduction. (Applause)

This is up from $499,000 last year at the same time. We've seen a 39 percent increase in the number of donors to the annual fund. We have 959 donors compared with 690 at the same time last year. Our participation rates for alumni year-to-date are 6.2 percent for the annual fund versus 4.2 last year at this time, and, up 7 percent overall including alumni and others versus 5.7 percent last year.

I want to thank all of these generous donors for their gifts and their pledges, especially those who've responded recently to the challenge.

Corporations and foundations are very important to our institution as well as parents and trustees. These are all major gifts. Major gifts are defined as gifts over $10,000. I can't read all of the gifts over $10,000 because there are 56 of them just in this fiscal year representing [an] increase of more than $2 million. (Applause)

Parents. We have seen a 79 percent increase in contributions to the annual fund from the parents of our students and former students -- an increase to $94,000 from $52,000 last year at this time -- and we expect three major gifts of $10,000 or more totaling $40,000. Last year we had no major gifts in this category. So parents have stepped up. Thank you! (Applause)

And our Board of Trustees, stepping up as well with a 28 percent increase in the level of giving compared with last year.

So please join me in thanking all of our generous donors. (Applause)

PART II: AN EXTRAORDINARY INSTITUTION

That brings me to part two of the three parts of my remarks.

There really is no other institution like Cooper Union -- and I've been at a number of institutions. As I've been here I've learned more and more. By teaching and working with students and faculty, I've learned more about the texture and the nuance of the very special qualities. Among them is an unparalleled commitment by students to their work. If I come in on a weekend or I'm working at night, the community of students is centered around their creative work -- which is extraordinary. The conversations in the hallway, the conversations in the elevator, are about their creative work. Their relationships for the most part are built on their work and that's unique. It is a meritocracy.

There is a unique set of schools: Art, Architecture and Engineering. I don't know that there is another institution that has quite that combination. That carries with it very special opportunities.

And then there is the dynamic, edgy East Village which is a huge attraction to students. If we take a walk late at night or even wake up at 3 a.m. to take the dogs out, the place is alive. And Cooper Union has had more than a 100-year history of providing full tuition scholarships to all students. (Applause)

Now when I talked about the commitment that students have to their work, often it's just within a school. It's either art students working on a project or engineering students working on a project, and that's fabulous. But you also see some collaborative projects. I think we can take that to the next level as a way to leverage this unique mix of schools.

Toby Cumberbatch just told me the other day about a partially planned and partially serendipitous coming together of students and faculty from three schools. A few weeks ago, Margaret Morton, a professor in the School of Art, brought her 2DD class to talk to Toby Cumberbatch's electrical engineering class about design for refugee shelters. Then a little bit later Professor D. Grahame Shane from the School of Architecture came and talked to the class about domes and architecture, also for use as refugee shelters. During one of those classes, about 15 engineering students built the prototype of a shelter in the gallery at 41 Cooper Square. I think these are the moments, students coming together and faculty coming together from different schools, that can provide the kind of innovative spark that can make Cooper Union truly unique going forward.

Now in one of the small group discussions that I've been having in my office (alumni, students, faculty, staff and parents can sign up online to join in these small groups), one person said to me, quoting an iconic novel [“A Tale of Two Cities” by Charles Dickens], "These are the best of times, these are the worst of times." Well, I'll start with the worst and then say a little bit about the best. They're the worst of times nationally.

We are in the greatest recession since the Great Depression and there is a lot of anxiety in this country. There are huge budget deficits in the federal government. The nation itself has mountains and mountains of debt. Our tax structure, and here I'm offering a personal opinion, is skewed. Those who can contribute more should contribute more, to help solve our national problems. We see from Occupy Wall Street that there is a very substantial polarization in the sense of where our country should go. Social Security, Medicare, those funds are under tremendous pressure and it's going to be extremely important for the wealthy in this country to step up to make possible these social safety nets for those who didn't have the same opportunities or fell between the cracks.

There is also the tone of the discussion at the national level that has made it very difficult for the nation to move forward constructively.

Then there is a national demographic that affects all institutions, including Cooper Union, which is the Baby Boom Generation. It is moving inexorably towards having greater needs in health care as they retire and as they live long lives following retirement. This is going to be an extraordinary challenge for our nation in the next decades as this demographic peaks. That also will be happening at Cooper Union. Even as we talk about some of our immediate budget challenges we have to be mindful of future challenges. As members of our own community who also represent the same demographic move through and retire, there are going to be huge liabilities. By liability I just mean it in the financial context for the institution—honoring commitments made for covering the post-retirement medical benefits as well as the expenses associated with providing a high level of care.

I believe that this country should make an extraordinary commitment to education. … [Take] even a fraction of what has been spent on war [and] on other things that gobble up massive amounts of money, [and] put it towards pre-K education, towards K-12 education and towards higher education, as well as [improving] the job skills of those who are unemployed.

We would be preparing the groundwork for an extraordinary future in this country. Cooper Union, and other institutions would also benefit from those investments. So that's my political view, but I do think that the nation is on the wrong track and not seeing education as the key investment. It's an investment in people, it's the most important leveler in the sense of giving a leg up to those who happen to be born in unfortunate circumstances and enabling people to keep up with their job skills. At the moment, I don't see that happening. I don't see that happening in Washington. I don't see that happening at the state level because the state has slashed higher education budgets. The state cannot print money; the federal government can.

So we have a very significant set of challenges as a nation which is mirrored in many ways at Cooper Union. I feel strongly that we need to develop a sustainable financial model that enables our institution to be vibrant now and forever. (Applause)

Just as the environment needs to be put on a sustainable footing, just as our federal budget needs to be put on a sustainable footing, so too should Cooper Union’s budget. As I have sought to learn about the history of Cooper Union, there has not been a sustainable budget model for at least 40 years, probably going back further. If some of you want to ask questions about that I'm delighted to talk about the history.

The challenge now, though, is that there are no obvious assets to sell. Selling assets is just a stop-gap measure. You do it to preserve a central feature of the institution, full tuition scholarships for all. It was done for that reason. There might be some less obvious assets and those ideas are coming forward. I want us to explore them. The stock markets that have bailed out the institution for many years are not performing in that way. In fact many experts aren't even sure that the usual 5 percent that one withdraws from an endowment in a sustainable financial model will be available. So there is a very, very serious challenge.

To quantify that challenge the number that I've used is a rough number, and we can debate whether you should include depreciation or funding for post retirement medical benefits or whether you should use gifts as part of your operating budget. We have roughly a $20 million shortfall on the annual basis. It might be smaller than that. As our unrestricted pool of the endowment becomes depleted, the return on that investment also shrinks, which increases the deficit.

We are working on the cost side as well to bring down costs so that those numbers can come down. Those are just rough numbers.

These are also the best of times, because there's opportunity in innovation, in entrepreneurship, and that is where Cooper Union can be so good! I talked about how, if students in all the schools and faculty can get together with a sound grounding in the humanities and social sciences, then there is no reason why in the long term we can't have a kind of innovative entrepreneurial culture that spins off in financial terms. I've worked in this arena, technology transfer, but in the arts, [think of] the creativity that can be brought to bear. We can in the long term establish an environment which is exactly what the nation needs, as well, to be more effective in a global economy. I want to get that going and I know that a lot of you want to get that going and we can do that. It's a long-term strategy. We need short-term and [medium-term] strategies as well.

PART III: PROCESS

Part three. Let me just end by saying in our strategy going forward I think process is important. There are people who are impatient about this. They are more quantitatively-oriented, saying ,"Just tell us what the plan is and we'll do it."

But [we need] process for obvious reasons, because some of the things that are being discussed are very, very serious to members of the community, and I understand that. So there are several pieces of the process that I propose. The first is the Revenue Task Force.

This is a challenging leadership task. Leadership is about choosing. Leadership is about evaluating a situation thoroughly and about having to make a tough choice. It's easy to jump on a bandwagon. It's easy to fan the flames of rage. It is much more difficult to actually assess a challenge and the opportunities, and come up with a plan, or a set of options, that are not wishful but that are sound, based in experience. I want you to thank these people, particularly the alumni who have big jobs themselves, for agreeing to take the time to serve. (Applause)

It's absolutely essential that we look at the cost side. This cannot be done through revenues alone and it cannot be done through costs alone. The magnitude of the challenge is large and both will be necessary. On both fronts I can assure you the choices are difficult. It will be the quiet, thoughtful effort that will lead us through this. So we will have convened by T.C. Westcott [vice president for finance and administration] an Operational Savings Group which will look at everything from printing costs to energy saving to a whole range of things.

We will be conducting an Administrative Review -- bringing in an experienced external consultant with no stake in the game to look at our administrative structure and processes. I've always believed that an administration should exist only to serve the educational activities of the college, the research and creative work of the faculty and the public service part of our mission. (Applause)

I will make some very hard-nosed assessments to make sure we have the leanest, meanest, most effective, most catalyzing administrative structure that enables our students and faculty to do their creative work. (Applause)

As the chief academic officer I will be conducting an academic review, which will include [internal and] external input to make sure that academically we maintain unsurpassed levels of excellence. So that Cooper Union will be known always as a place that has the highest standards of excellence and is distinctive in it's own way. We must teach the kinds of things that students graduating in 2011 should be learning to make them the most innovative and effective citizens.

And finally, I'll be convening a set of brainstorming sessions, because even as we work to solve financial problems, we always have to keep imagining on the positive side, "What should Cooper Union be like in this world that is changing so fast?" "How can we make the most important contributions to serving the public?" I will be setting up some opportunities for people to brainstorm about the future because in the end, we will come through this financial problem a stronger more vibrant institution and we will need all of those ideas.

So let me just close by thanking you all. I'm going to need your help. I'm going to need your support. Thank you very much. (Applause)

Founded by inventor, industrialist and philanthropist Peter Cooper in 1859, The Cooper Union for the Advancement of Science and Art offers education in art, architecture and engineering, as well as courses in the humanities and social sciences.